Level 3 Accounting, 2015

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Sydney Townsend
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1 SUPERVISOR S Level 3 Accounting, Demonstrate understanding of company financial statement preparation 2.00 p.m. Monday 30 November 2015 Credits: Five Achievement Achievement with Merit Achievement with Excellence Demonstrate understanding of company financial statement preparation. Demonstrate in-depth understanding of company financial statement preparation. Demonstrate comprehensive understanding of company financial statement preparation. Check that the National Student Number (NSN) on your admission slip is the same as the number at the top of this page. You should attempt ALL parts of all questions in this booklet. Pull out Resource Booklet 91406R from the centre of this booklet. If you need more room for any answer, use the extra space provided at the back of this booklet. Check that this booklet has pages 2 12 in the correct order and that none of these pages is blank. YOU MUST HAND THIS BOOKLET TO THE SUPERVISOR AT THE END OF THE EXAMINATION. TOTAL New Zealand Qualifications Authority, All rights reserved. No part of this publication may be reproduced by any means without the prior permission of the New Zealand Qualifications Authority.

2 2 QUESTION ONE (a) Fashnz Limited, a supplier of designer clothing, has the following equity account balances on 1 April Contributed equity ( fully paid shares) Retained earnings Prepare the General Journal entry to record the payment of the 2014 final dividend of 12 cents per share on 15 May 2014 by Fashnz Limited. Fashnz Limited General Journal 15 / 5 / 2014 Payment of 2014 final dividend

3 (b) 3 The General Journal entry below shows the repurchase of shares by Fashnz Limited at a fair value of $5 per share. Fashnz Limited General Journal 19 / 8 / 2014 Contributed equity Retained earnings Bank Explain the effects of this transaction on both the contributed equity and retained earnings ledger accounts. In your answer, explain how the figures were calculated, including the number of shares repurchased by Fashnz Limited. (c) On 1 September 2014, Fashnz Limited employed a share broker to manage offering the public shares in the company at $6 per share. On 1 October 2014, the share broker issued the shares, and the net proceeds of the share issue were given to Fashnz Limited, after deducting 5% for brokerage fees. Prepare the journal entry to record this transaction. Fashnz Limited General Journal 1 / 10 / 2014 Net proceeds of share issue received from share broker

4 4 (d) On balance day, Fashnz Limited s accountants recorded the following general journal entry. Fashnz Limited General Journal 31 / 3 / 2015 Income summary Taxation payable Additional information An interim dividend (2015) of $ was paid on 1 November Profit before tax is $ for the year ended 31 March An independent revaluation of Fashnz Limited s land was received on 31 March 2015 that determined a fair market value for land of $ The ledger account balance for land at 1 April is $ DR. (i) Complete the General Ledger Retained Earnings account from 1 April 2014 to 31 March 2015, using the General Journal entry and additional information above, and other relevant information from (a), (b), and (c). The opening balance has been entered. Fashnz Limited General Ledger Retained Earnings 1 / 4 / 2014 Balance CR (ii) Complete the Shareholders equity section of the Statement of Financial Position (extract) as at 31 March 2015, using the additional information above, and other relevant information from (a), (b), and (c). Fashnz Limited Statement of Financial Position (extract) as at 31 March 2015 Shareholders equity

5 5 This page has been deliberately left blank. The examination continues on the following page.

6 6 QUESTION TWO Refer to Resource A in Resource Booklet 91406R. (a) Prepare Green s Green Waste Collection Limited Statement of Cash Flows for the year ended 31 March 2015 on the next page. Note: The company did not undertake any investing activities during the year. Show your working, which may be marked. WORKING

7 7 Green s Green Waste Collection Limited Statement of Cash Flows for the year ended 31 March 2015 NZ$000 NZ$000 NZ$000

8 (b) Explain, with detailed reasons, the cash figure you have entered for Other expenses in Green s Green Waste Collection Limited s Statement of Cash Flows for the year ended 31 March

9 9 QUESTION THREE Refer to Resource B in Resource Booklet 91406R. (a) Complete the Statement of Comprehensive Income for Antiques Online Limited for the year ended 31 March You are not required to prepare the Notes to this statement. Antiques Online Limited Statement of Comprehensive Income for the year ended 31 March 2015 NZ$ NZ$

10 10 (b) The following totals were reported in Antiques Online Limited s financial statements after the additional information was taken into consideration: Current assets $ Current liabilities $ Non-current assets $ Non-current liabilities $ The company declared a dividend of 5 cents per share from 2015 profits at the Annual General Meeting on 25 June Explain, using the totals above, how the directors of Antiques Online Limited satisfied either the Liquidity Test OR the Balance Sheet Test requirement of the Solvency Test when making the dividend declaration.

11 11 QUESTION NUMBER Extra space if required. Write the question number(s) if applicable.

12 12 QUESTION NUMBER Extra space if required. Write the question number(s) if applicable

Level 3 Accounting, 2017

91406 914060 3SUPERVISOR S Level 3 Accounting, 2017 91406 Demonstrate understanding of company financial statement preparation 2.00 p.m. Friday 10 November 2017 Credits: Five Achievement Achievement with